THE Federal Government has lost about N105.1 billion since November 2008 due to the shutdown of the Soku gas plant in Rivers State, which used to provide 40 per cent of the gas need of the Nigerian Liquefied Natural Gas (NLNG) in Bonny, Rivers State.
The Soku gas plant, which is operated by the Shell Petroleum Development Company (SPDC), was commissioned in 1999 to produce 577 million standard cubic feet of gas per day. It was upgraded in 2006 with the installed capacity to produce 1.1 billion standard cubic feet of gas per day, prior to the shutdown.
By this development, NLNG is already losing 40 per cent of its natural gas supply. Shell estimates that the country is losing an average of $180 million per month since the plant was shut down in November 2008.
Shell’s decision to shut the facility, according to the Eastern Swamp Operation Manager, Mr. Boma Brown, was to stop the multi-billion naira gas plant from being engulfed by fire that might be occasioned by the activities of oil thieves who have severely compromised the 50 kilometres condensate to Bonny NLNG.
According to Brown, oil thieves in their bid to steal condensate, which is a by-product of gas, have shifted their activities up to the parameter fencing of the Soku gas plant.
He told journalists in Port Harcourt yesterday: “We have to take a decision to shut down the facility. It is easy to see the revenue but there are enormous challenges to produce the revenue.”
He blamed militants and other criminal groups involved in oil theft for compromising over 200 spots on the pipeline. He explained that a fire outbreak at some of the compromised points on the pipeline resulted in the fire destruction of a Shell communication mast.
Brown explained that Shell’s effort to reopen the gas plant was being thwarted by security challenges posed by the activities of militants in the creeks that have made it impossible for the movement of personnel and heavy equipment.
The Movement for the Emancipation of the Niger Delta (MEND) last September attacked the Soku gas plant during a week-long campaign against oil companies code-named “Hurricane Barbarossa”, which MEND declared in response to what the militant group described as unprovoked aerial and marine attacks on one of its positions in Rivers State.
The Shell manager, who explained that it cost between N3 million and N5 million to drill each hole for the stealing of condensate on the pipeline, bemoaned the wilful destruction of the fragile ecosystem, which sustains life of the coastal communities.
Brown said: “People are destroying the environment so that they can get money. We cannot produce and revenue is lost. It’s more of a double tragedy for us. Outside, people say you cannot go in. The most disturbing is the situation where you have armed people. We have the capacity to deal with the communities. But the militants are not structured in a way we can to work with them.”
He stated that though Shell had identified the participation of host communities in contracting opportunities and the faithful implementation of Global Memorandum of Understanding (GMoU) as some ways to check oil theft, they were not enough solutions to the problems.
Brown, who exonerated the host communities from pipeline vandalisation, which he blamed on a network of well-funded and organised criminals, called for more government presence in these communities as a way of reducing poverty, which might lure people into crime.
The manager said that Shell had halted the signing of GMoU with its host communities due to funding problems. He then appealed to people of the region to renounce violent means for seeking redress by following agreed framework for grievance resolutions.
Shell’s spokesperson, Mr. Precious Okolobo, who bemoaned the $180 million that is lost monthly since November, said the company wanted to resume the supply of gas to NLNG and continue to work with the Federal Government to ensure that its facilities in the Niger Delta were protected.
The Head of Oil Spill Response, Mr. Usman Anibasa, said Shell had been able to remediate 50 per cent of the 400 hectares of swamp that was affected due to fire and hydrocarbon spill.
He said: “Originally, we discovered 101 holes within 650 metres of five kilometres. By yesterday (Wednesday), it has increased to over 200.”